An Aging Japan Births New Challenges

The demography of the world is shifting. Many countries in the world are amidst the transition from a population characterized by a high birth and death rate to one characterized by a low birth and death rate. Japan’s low death rate and even lower birthrate make it the front-runner in this transition. However, it is not as if countries are exactly racing to the finish line, due to the challenges that such drastic demographic changes present. The speed at which Japan has experienced this transition has resulted in its status as the world’s most aged society.1 With this status come substantial economic challenges and opportunities, as the country grapples with how the Japan of the past will transition into the future.

Elderly Japanese Women. Source: Flickr

Policy makers are struggling to determine how to either reverse or adapt to the shifting demographic profile of Japan. Fertility rates are currently well below those needed for population replacement, resulting in a rapidly aging population. Low fertility rates are partially due to the increase in family planning seen in the twentieth century, after the population boom after World War II.2 There was a conscientious effort by the government to stage and standardize the life cycle, in part so that families could match career planning with family planning. Family planning was also viewed as an individual right and a part of maternal and child health. Efforts to stage the life cycle were compounded by the prevalence of contraceptives and low-cost, safe abortions.2 The controversy that exists in other parts of the world surrounding barrier methods, hormonal birth control, and abortion tends to be less pronounced in Japan. Japanese women had both the means and the desire not only to space births, but also to limit the number of children that they had.

The low fertility rate also resulted, in part, from economic decline. The disintegration of job security and, most notably, lifetime employment in the late twentieth century was a tangible sign of a new period characterized by economic instability.3 Job insecurity was a disincentive for many people to get married and raise families. There was an aspect of practicality in maintaining a single-person household due to the high costs of child rearing.4 The socioeconomic instability at the turn of the century pushed notions of large families into the realm of irresponsibility, or even impossibility. Furthermore, social and cultural shifts around this time began to create a more individualized society with a new set of values, which did not necessarily revolve exclusively around home-life. Some have speculated that these new values could be partially due to the unstable socioeconomic environment in which the adults of the “lost decade” were raised.5 Thus Japan faces a dilemma of which problem to attempt to fix first—the declining fertility rate or the unstable economy. However, it appears that one cannot be fixed without the other.

Low fertility rates are not the only factor contributing to the rapidly changing demography in Japan. Better end-of-life care has resulted in an extremely low death rate, even compared to other high-income countries. Japan has the highest life expectancy in the world, and over a quarter of its citizens are above age 65.1 High life expectancy is often thought to indicate population health, but these longer lifespans have major implications. The postponement of death does not necessarily equate to the prolonging of health. It is likely that the high life expectancy in Japan is indicative of a longer time lived with

Children in Japan. Source: Pixabay

disability. Increasing life spans are associated with increasing prevalence of non-communicable diseases and a greater need for palliative and long-term care. As the demographic transition continues, the government will face an increased demand for health and social benefits for the elderly. It is particularly important for both ethical and economic reasons that efforts for better health benefits delay the onset of morbidity, rather than simply increase lifespan, so that the elderly spend less time in poor health. However, the declining fertility rate means that fewer people will be paying the taxes necessary to fund pensions and national insurance schemes. Japan must devise alternative ways to fund these much-needed services.

The declining fertility rate in Japan poses great economic challenges. Aside from the general decrease in tax revenue that could be used to care for the elderly, the extremely low fertility rate results in a shrinking workforce and a less robust economy. A shrinking population and workforce corresponds to a decline in Japan’s power on a global scale.6 In particular, the manufacturing and agriculture industries will undergo major changes as a result of the demographic shift. The prospects for a natural increase in workforce size appear somewhat bleak, as the population is projected to continue to decline for the foreseeable future. Also, there is the distinct possibility that government initiatives could have unintended consequences that hurt the already lagging economy, since short-term and long-term goals appear somewhat at odds with one another. By encouraging the growth of families, for example, the government increases the possibility that women will leave the work force in order to raise children, thereby increasing the population in the long term but decreasing the workforce in the short term.

It is difficult to determine exactly what effect the demographic transition will have on Japan and what it will take for fertility rates to rise again. At the current stage in the transition, however, it is clear that Japan must take action in order to prevent the collapse of its economy. While Japan has faced economic challenges in the past, its shrinking population poses a unique challenge at the present and in the future. Japan must find a way to shift the economy in response to the shifting demography.

Yet it is unclear what Japan will need to do to handle the challenges presented by its changing demography. Furthermore, it is unclear where the future lies, whether in better elderly care or perhaps the introduction of new worker populations. The ways inwhich Japan handles its challenges and capitalizes on the opportunities presented by the demographic transition will serve as a prototype for other countries going through similar transitions. Japan, therefore, can be the canary in the coalmine for the rest of the world. Its successes and its failures will be an example of what works and what does not when birthrates and death rates plummet. The world is watching as Japan grapples with this transition.

3 Hamaaki, J., Hori, M., Maeda, S., Murata, K. (March 2011). Changes in the Japanese Employment System in the Two Lost Decades. Retrieved from http://www.esri.go.jp/jp/archive/new_wp/new_wp020/new_wp018.pdf